Purpose -This paper aims to assess the main sources, key propositions and empirical methods available to researchers taking a "subjectivist" perspective on the creation of opportunities by entrepreneurs. Design/methodology/approach -Subjectivist research is defined behaviourally: it emphasises the internal, mental processes and subjective meanings incorporated in entrepreneurial acts. The alertness literature is accorded special attention; it originally possessed a strong subjectivist orientation and focused on opportunity recognition. Findings -A subjectivist approach has distinct advantages: it requires researchers to observe, analyse and explain entrepreneurial creativity with reference to entrepreneurs' internal, personal interpretations of their environment. Subjectivist approaches ask: how do entrepreneurs create profit opportunities? Subjectivists extend the concept of entrepreneurial alertness to include analysis of knowledge construction processes. Research limitations/implications -Fruitful theoretical and applied subjectivist research de-emphasises entrepreneurs' exploitation of existing opportunities; knowledge construction fundamental to the genesis of creative behaviour becomes central. Practical implications -There are several empirically oriented organising frameworks available in the literature consistent with a subjectivist orientation to entrepreneurial creativity. Originality/value -This is the first attempt to assess and synthesise modern subjectivist work on the creative dimension of entrepreneurial behaviour. It identifies complementary conceptual developments on the interface between economics and psychology. Some promising empirical methods are suggested.

This paper compares and appraises three principal, contemporary theories of entrepreneurial decision making – neoclassical, Austrian and behavioral. We employ theory appraisal criteria made available in Fritz Machlup’s (1967) celebrated article on alternative theories of the firm. The paper considers theories that treat sequences of behavior by which individual entrepreneurs reach decisions on two levels: the discovery of profit opportunities and their exploitation. We also consider how each theory characterizes the entrepreneur’s decision making process by contrast with the posited behavior of other economic agents. Austrian theory is suited to explaining novel, adventurous behavior at the discovery stage. The algorithm for opportunity exploitation in both the neoclassical and Austrian approaches is a single-repertoire, optimization rule. Neoclassical theory is situated in frictionless, atomistic Walrasian markets and emphasizes mathematical tractability. Austrian and behavioral theories conceive entrepreneurial acts taking place in market processes understood as complex institutional phenomena. There are strong theoretical complementarities between Austrian and behavioral approaches; both approaches value descriptive accuracy, though the behavioralists place more weight on operational tractability. Austrians and behavioralists share an interest in heuristics; they emphasize the role of prior micro-level knowledge at the discovery stage. Therefore more collaborative research in future between Austrians and behavioralists should prove fruitful. Copyright Springer 2006alertness, entrepreneurial behavior, heuristics, optimization, theory appraisal, M13, M21, D21, B41,

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Entrepreneurial behaviour, Optimisation, Cognitive limitations, Tacit knowledge, Schumpeter, Schumpeterian economics, B25, D83, L26,

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